Marketing Manager: “Net Promoter Score is the one number we need to grow!”

Customer Intelligence Manager: “Nonsense! ‘Satisfaction’ predicts customer loyalty better than ‘likelihood to recommend’ – it says so in the wonky business journals I read!”

Marketing Manager: “You don’t understand how business works!”

Customer Intelligence Manager: “You don’t understand how math works!”

The sad thing is that in a micro sense they’re both right, but in a macro sense they’re both wrong. The reason? They’re each taking an inside-out point of view based on their own specialties.

Where NPS Fits In A Customer Experience Measurement Framework

In our research into customer experience measurement, we see many organizations that use Net Promoter Score. Some use it poorly because – like the fictional marketing manager above – they don’t understand the limitations of what NPS can do.

Here’s how they should think of it: Customer experience is how customers perceive their interactions with a company along each step of a customer journey, from discovery, to purchase and use, to getting service. NPS measures what customers say they’ll do as a result of one or more of those interactions. It’s what Forrester calls an “outcome metric.”

But outcome metrics are just one out of three types of metrics captured by effective customer experience measurement programs. The best programs gather and analyze:

Many of our clients work at companies that use Net Promoter. I recently had dinner with two of them at Forrester’s Customer Experience Forum, 2011. Both are senior people at companies that have been recognized as customer experience leaders in their respective industries.

When a third guest (Forrester’s CEO) asked them why and how they use Net Promoter Score (NPS), they gave remarkably consistent answers. In brief, they use it as a simple, easy-to-understand metric — one number — for aligning the business. Its main appeal is that busy executives don’t need to spend hours studying tables and spreadsheets to get a sense of how their firms are doing. Similarly, frontline employees down to the lowest levels of the organization find that NPS makes intuitive sense.

But there’s a next big (and obvious) question for people like our dinner guests who work to improve the customer experience at their companies: Does improving customer experience raise NPS? Because let’s face it, if your firm ties its overall health back to NPS, then you better be able to connect the dots for what you do, or you won’t seem to matter.

We’ve been wondering about this issue ourselves. So much so that late last year when we ran the big consumer survey that drives our Customer Experience Index, we included the Net Promoter question for two of the 13 industries in our study: banks and retailers. We were looking for a correlation between how people rate the customer experience at a company they do business with and how likely they are to recommend that company to a friend or colleague.